New rules on the transactions of state-owned assets and equities in non-listed domestic firms have jointly been issued by the State-owned Assets Supervision and Administration Commission (SASAC) and the Ministry of Finance.
It was the first time standards and procedures have been clarified in this field to prevent irregularities and losses of state assets and to ensure open market practices, a commission spokesman said Thursday.
Only a small proportion of state-owned enterprises have been restructured into publicly-listed companies. Assets in all other enterprises are traded in so-called assets and equities markets, and many market rules have remained unclear.
To take effect on Feb. 1, the regulation will pave the way for the operation of these markets, which have been small in many places in China, but now may become more open, standard and grow more widespread, according to Friday's China Daily.
According to the regulation, the information of the seller and the assets to be sold, including the relevant financial figures, should be published on designated media and the website of the markets.
Transactions can be made though public bidding, auctions, or, under certain circumstances, private negotiations.
But deals involving insider trading and fraud may be declared invalid by the state-assets supervisory agencies.
Industry analysts take the new regulation as a milestone move in assets-related legislation in reforms of state-owned enterprises (SOE), now that number of SOE-based mergers and acquisitions has risen rapidly.
China has about 170 assets and equities markets, but only three large-scale ones, which are in Beijing, Tianjin and Shanghai.
(Xinhua News Agency January 9, 2004)
